A New Orleans school gave students $50 a week. Then researchers watched how they spent it.


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Once a week for a year, $50 was deposited into Jalen Hyde’s banking account.

Hyde, currently studying engineering at Tuskegee University in Alabama, would typically put it into a savings account for a rainy day. But occasionally he used it to buy food or go bowling with friends. When he got to college, some he had saved went toward laundry. He used the last of it on a college textbook that cost $107.52.

Hyde and nine of his classmates at the Rooted School, a New Orleans charter school, were part of a guaranteed income study by the school, New Orleans education incubator 4.0 Schools, and the Center for Guaranteed Income at the University of Pennsylvania. For a year beginning in October 2020, 10 students were given $50 per week, with no strings attached and no spending stipulations.

Shelly Ronen, a research scientist at the Center of Guaranteed Income, said the study was the first of its kind to focus exclusively on high school students and participants were among the youngest of any guaranteed income study.

“It hasn’t really been documented before,” she said. “We can solve poverty and we can solve it directly at the source by giving people guaranteed income.”

A ‘necessary buffer’

Over the course of the study, students were surveyed about their household finances, mental health and financial attitudes.

Vernell Cheneau, another participant, said he used the money to invest in equipment for his T-shirt printing business, including a small printer and a printing press. 

“I was allowed to do such things because I had extra income that was stored away,” he said. During a period of unemployment after graduation, he said, he was grateful to have a “buffer” of savings.

Jonathan Johnson, founder and CEO of the Rooted School, said the study aligns with the school’s mission of eliminating the racial wealth gap.

“We must trust that students experiencing poverty lack cash but not character and that young people experiencing economic insecurity know best how to use cash in ways that improve their life outcomes,” Johnson said.

Researchers found that the cash transfers lessened financial hardship of participants. At the beginning of the study, 40% of participants said their families had not paid the full amount of rent or mortgage at some point in the last year and 50% said their families had trouble paying for gas or utilities. That number shrunk to 0% for both categories at the end of the study, though Johnson noted that families may have benefitted from stimulus payments or other incentives offered during the pandemic.

“Generally speaking, the narrative around young people experiencing poverty is that they’re going to use the money on things like drugs … and essentially waste the money,” Johnson said.

But the study showed otherwise. Some students saved for college, others invested in stocks or cryptocurrency, others started businesses.

“When given the power to make decisions about what to spend their money on, students ultimately spent money on what they needed and those needs ranged from snacks to stocks,” Johnson said.

Hyde has since started a podcast to advocate for universal basic income.

“Money is such a basic common factor in life but when you get down to it so many people don’t know what to do with it because they don’t have it,” Hyde said. “If you give them that opportunity to learn from it they will.”

A broader movement

New Orleans was one of 60 cities selected for a pilot guaranteed income program by the Mayors for a Guaranteed Income, which gave 125 people between the ages of 16 and 24, $350 per month for 10 months. A separate program funded by Mastercard and Mobility Capital Finance gave 125 young people $200 per month for four months.

Though the study had a small sample size, Johnson said the group hopes to launch another study with 200 plus students over the 2022-2023 school year.

“We’re hoping this study allows the public to look beyond the black and white political implications that often get twisted into this … and ask questions about what’s possible,” Johnson said.

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